Agriculture the Only Industry Hurt In Trade War?
I am sure I am a little biased in thinking the Agriculture Industry, mainly farmers have been the only Industry hurt in the trade war with China, European Union, Mexico and Canada. However, watching business channels on television, listening to the National News and reading many articles, no other industries have been mentioned as having been hurt like Agriculture. I asked Dairy Economist Bill Brooks with E Dairy Incorporated if Agriculture was harmed more than almost all other Industries.
Bill said Agriculture seems to have been hurt the worst for a number of reasons. Agriculture exports a much larger percent of our production (food) than other industries. So we are more dependent on exports than other industries. In addition the price we receive for our production is set by the futures market. The job of the futures market is to try and determine what our production will be worth at some time in the future. The market may at times overreact until more is known about the true impact.
We have an incredible Agriculture system in the United States that is extremely efficient. We can produce a lot more food than what is needed to feed this nation. In addition the food is very competitively priced on the world market, so we export a lot of food to other Nations. However, when politics get involved basic economics do not apply, at least for a while! This reminds me of another old phrase in the grain markets, "you live by exports and you die by the exports."